A Health Insurance Exchange is not a good thing w/update

Is an Exchange better than a public option?

The President and his minions keep throwing out words like "co-op" and "exchange." Always they dangle the word "competition", when neither a co-op or an exchange offer any such thing.

Jarid Brown explains the concept of exchange in "The Difference between President Obama's health insurance exchange and a marketplace."

To quote Jarid:

The concept is pretty simple: If I paid you a hundred dollars to come into my widget shop, would you pass it up to go into the widget shop across the street? The net result of the health insurance exchange will be the creation of a market with limited competition, all offering the same product with little variance in premiums. As a consumer, you will no longer have the ability to lower your costs or choose additional coverages. Moreover, just as in the Medicare Supplement industry, the companies with the largest available resources, name recognition and who enter the earliest will capture a larger market share, thereby forcing smaller companies to abandon the health insurance exchange, further reducing competition and creating the possibility of manipulation in pricing. The government health insurance exchange does not enhance nor promote competition, but rather creates a government supported monopolization of the health insurance industry by a select group of companies.

Excerpts from this morning's AP article Dems seek to play down role of public option idea

The public plan is envisioned as being offered alongside private coverage through a new kind of purchasing pool called an insurance exchange. At least initially, the exchange would be open to small employers and people buying coverage on their own.

Listen to what Orrin Hatch (R-Utah) has to say in the same article:

An alternative to the broad overhaul could be as simple as providing subsidies to the roughly 15 million Americans who he said truly cannot afford coverage.

"C'mon, we're living in the real world here," said Hatch, who serves on the Senate Finance Committee. "People all over the country don't want this."

Update from Hot Air:

[...]

The problem with this arrangement [Exchanges] is that the government sets the terms for private insurers, which makes them less competitive, far less innovative, and puts them at the disadvantage one sees when the regulator competes in the market it regulates. read the rest